27 Mich. 416 | Mich. | 1873
This was a bill to foreclose a mortgage. Substantially tbe case stated by the bill is this: Complainant having a mortgage (with a note) executed to bim by tbe defendant
That on the 13th day of February, 1869, the said deed and the said bond were, by mutual arrangement and consent, left with one Sidney S. Manzer of said, county of Shiawassee to be kept by him until the 9th day of January, 1870, then to be delivered to complainant, unless called for by said Holmes and complainant, both being present; that in accordance with said arrangement they were kept by said Manzer without being called for by said Holmes and complainant, until January 9th, 1870, when they were delivered to complainant, and both said deed and bond were duly recorded January 29, 1870, and are now in the possession of complainant, ready to be produced and proved, etc., and to which reference is made; that after said deed and bond were so executed and delivered and placed in Manzer’s hands, viz: about the 22d of July, 1869, said
It may as well be stated here that previous to the filing of the bill, White had paid complainant the full amount of his original mortgage of two thousand eighty-seven dollars and twenty-one cents and interest, and complainant had released that mortgage of record; so that the only questions in the case relate to the claim for half the Holmes and Hosley note, insurance, taxes and expenses.
The bill calls for an answer without oath, for foreclosure and sale, in the common form of foreclosure bills. All the defendants, by answer, admit the original mortgage of two thousand eighty-seven dollars and twenty-one cents to complainant, but allege its payment in full by White (about which there is no dispute). As to the note of Holmes and Hosley for six hundred and sixty-two dollars and seventy-two cents, White alleges his ignorance, and leaves complainant to the proof, and defendants, Holmes and wife, deny that complainant was the owner or holder of any such note as he alleges in his bill. All the defendants
They then set up that said deed was procured of them by fraud by complainant and Goldsmith; that they proposed to these defendants that they should execute a deed to Holmes, which might be deposited with some third person as an escrow, and complainant agreed to extend the time of payment upon the mortgage another year; and, if these defendants then could not, or did not desire to pay said8 mortgage, complainant agreed to pay them one thousand two hundred dollars and take the deed; and complainant pretended to have a contract to that effect written, which was read to defendants, which should be deposited with Manzer, together with the deed; that the bond referred to
The case was heard on pleading and proofs, and the bill dismissed.
It will be seen that two main questions arising in the case, and upon which the whole case hangs as to Holmes and wife, are: first, whether the deed of Holmes and wife to complainant, of February 12th, 1869, and the bond of complainant and Goldsmith, showing the purposes of that deed, constituted the real arrangement made between the parties, or whether the deed was obtained by fraud, and the execution of a different agreement, in place of which the bond was fraudulently substituted, as claimed by the defense; and, second, if there was no fraud, and the arrangement made by the deed and bond was fair, and understood by the parties, then, whether there was such a delivery of the deed and bond as to give effect to them between the parties.
As to the first point, the testimony on the opposite sides is directly in conflict. That of complainant and of Goldsmith, who drew the papers, is full, specific, direct and positive, that the deed and bond were read over and understood by the defendants Holmes and wife; and that the bond is the same agreement which was made, read and signed, and the only one drawn on the occasion; and their testimony fully sustains all the allegations in the bill in respect to the execution of the deed and bond, and the terms of the written agreement upon which they were left with Manzer; that of the justice (Runciman) who took
We are satisfied that the bond produced is the bond •agreed upon by the parties, and executed by the complainant .and Goldsmith; and that there was no fraud in obtaining .the deed. And though Holmes says he did not sign the
As to the question of delivery of the deed and bond to the respective parties before they were left with Manzer, the complainant testifies they were so delivered; Goldsmith only says, after they were executed they were placed in an envelope, and by direction of Holmes placed in Manzer’s hands; while defendants Holmes and wife deny that they were delivered between the parties before, though they admit they were, with their concurrence, placed in Manzer’s hands. And it is claimed on their part that they were placed in his hands merely as escrows, and that the deed could not take effect between the parties until a subsequent delivery, and therefore did not affect the land at the time of White’s purchase.
As a delivery to a third person for the benefit of the grantee, or the party in whose favor it is made, is just as much a delivery as if made to the grantee or party himself, unless some other intent 'is evinced, it often becomes a difficult question whether the delivery is merely as an escrow, to take effect upon a subsequent delivery after the performance of some condition; or whether it is to be effective between the parties from the time of the first delivery. We have already found that the papers were not delivered to Manzer upon any such condition as that set up by defendants. And it may be that, upon complainant’s theory, no very good reason appears why they should be left in the hands of a third person at all, instead of being delivered and recorded at the time.
But when papers show upon their face that they are
It is quite probable that the complainant and Goldsmith, if not also Holmes and wife, understood at the time that the effect of the deed and bond was to place the absolute title of the property in complainant, unless the matters of indebtedness stated in the bond should be paid before January 9, 1870.
But the deed being given by a debtor to his creditor to secure a debt in fact, the law (or rather the principle settled by courts of equity, which is a part of the law of the
And Mrs. Holmes testifies: “I was present at the time Mr. White came to buy the property of my husband. I then told him there were some sealed papers in the hands of Mr. Manzer. I told him there was a mortgage to be paid, of about two thousand one hundred dollars. I told him if that was not paid by the 9th of January, and they took the property, they were to pay us two thousand five hundred dollars.” Again : “ At the time of the talk with Mr. White, I told him there was a contract in the hands •of Mr. Manzer. I told him all I could recollect about the bond.” Defendant Holmes testifies to telling White substantially the same things.
It was therefore clearly the duty of White, as an honest, prudent man, before venturing on this purchase on the mere verbal representations of the vendor, either to learn the actual contents of the papers in Manzer’s hands, or to inquire of the complainant as to the extent of his rights in the property under those papers. He had sufficient notice to put him upon inquiry, and we are entirely satisfied that complainant, in the conversation White admits he had with him, said nothing which would relieve him from the duty to make such inquiries.
He therefore can not be considered a dona fide purchaser without notice, and the property in his hands is liable to the complainant to the same extent as if it had remained in the hands of Holmes.